Question

In: Economics

  Which of the following actions will increase bank lending? Instructions: You may select more than...

 

Which of the following actions will increase bank lending?
Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers.
The Bank of Canada buys $400 million worth of bonds from chartered banks.
The chartered banks raise the desired reserve ratio from 10 to 11 percent.
The Bank of Canada lowers the bank rate from 4 to 2 percent.
The Bank of Canada raises the bank rate from 5 to 6 percent.

Solutions

Expert Solution

Solution:-

  • -The Fed buys $400 million worth of Treasury bonds from Chartered bank
  • -The Fed lowers the discount rate from 4 percent to 2 percent.

Discount rate is the rate at which banks borrow from the Federal Reserve, hence a lower discount rate reduces the costs of borrowing by banks from the Fed and thus increases the amount banks would borrow from Fed

In the 2nd case if Fed buys $400 million worth of treasury bonds from Chartered banks, in return it would release $400 million to other banks. Thus the banks’ lending increases by $400 million.


Related Solutions

Which of the following Fed actions will increase bank lending? Select one or more answers from...
Which of the following Fed actions will increase bank lending? Select one or more answers from the choices shown   The Fed lowers the discount rate from 4 percent to 2 percent The Fed raises the reserve ratio from 10 percent to 11 percent  The Fed raises the discount rate from 5 percent to 6 percent The Fed sells bonds to commercial banks
Indicate which of the following explain wage stickiness. Instructions: You may select more than one answer....
Indicate which of the following explain wage stickiness. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. Minimum wage laws unanswered Union contracts unanswered Efficiency wages unanswered Wages paid to oil and gas workers unanswered Fast-food workers unanswered Trailing indicators unanswered
Which of the following is/are true about FUTA obligations? (You may select more than one answer....
Which of the following is/are true about FUTA obligations? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) FUTA is subject to a 5.4 percent reduction based on employer and state factors.unanswered FUTA applies to...
Select all that applies. There may be more than one correct answers. Which of the following...
Select all that applies. There may be more than one correct answers. Which of the following is a correct initialization of a C string? Group of answer choices string s[20] = "C++"; string s = "C++"; char s[20]; char* s = "C++"; char s[20] = {'C', '+', '+', '\0'}; char s[20] = ""; char s[20] = "C++";
1. Which of the following describes an endocytosis? There may be more than one answer. Select...
1. Which of the following describes an endocytosis? There may be more than one answer. Select one or more: a. A cell engulfs a bacterium by pushing its cell membrane around the bacterium forming a phagosome that will pinched off from the cell membrane and enter the cytoplasm. b. Specific solutes accumulate along an indented cell membrane that will form into an endosome and it will pinch off from the cell membrane and enter the cytoplasm. c. A process that...
Which of the following statements always apply to corporations?  (You may select more than one answer. Single...
Which of the following statements always apply to corporations?  (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Unlimited liabilityunchecked Limited lifeunchecked Ownership can be transferred without affecting operationsunchecked Managers can be fired with no effect...
Which of the following reactions is/are redox reactions?  You may select more than one reaction. BaCl2(aq) +...
Which of the following reactions is/are redox reactions?  You may select more than one reaction. BaCl2(aq) + Na2SO4(aq) = BaSO4(s) + 2NaCl(aq) Cl2(g) + 2K(s) = 2KCl(s) O2− + H2O(l) = 2OH− PH3(g) + HNO3(g) = NO2(g) + 3H2O(l) + P(s) C6H12O6 + heat = 6C(s) + 6H2O(g) 2HNO3(aq) + Ca(OH)2(aq) = 2H2O(l) + Ca(NO3)2(aq)
1.Which of the following characterizes a relative polycythemia? There may be more than one answer. Select...
1.Which of the following characterizes a relative polycythemia? There may be more than one answer. Select one or more: a. A type of polycythemia that promotes erythropoiesis; therefore, increases the number of circulating erythrocytes above normal. b. A type of polycythemia that does not promote erythropoiesis but increases the number of circulating erythrocytes above normal. c. Hypovolemic shock d. Anemia e. High altitude 2.What is TRUE about diabetes? There may be more than one answer. Select one or more: a....
You may choose more than one answer. Which of the following is a mechanism of signal...
You may choose more than one answer. Which of the following is a mechanism of signal amplification in the cAMP-PKA pathway? One signal molecule, epinephrine, activates lots of G-proteins. When activated, adenylyl cyclase synthesizes many cAMP molecules. cAMP-activated protein kinase A (PKA) can activate a number of target proteins by phosphorylation. Proteins phosphorylated by PKA can further activate other proteins that make other products
You may choose more than one answer. Which of the following phosphatases activate their substrates by...
You may choose more than one answer. Which of the following phosphatases activate their substrates by phosphate group removal? PPPs (phosphoprotein phosphatases) PHLPP (PH domain and leucine rich repeat protein phosphatases) isofroms Protein kinase C CD45 antigen (protein phosphatase, receptor type C)
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT